When worse is better….

Susan Pal:

Decision Problem
Let me begin this post with a puzzle.

Alex and Bob work as financial advisers for the same company. They receive equal salaries from the company. They behave well at office. Both work on similar assignments. Each assignment required a yes-no decision. The company uses the decisions made by them to make profits.

After the recession hit the company very badly, they have to fire one of them. Both Alex and Bob have worked on almost the same number of assignments in the last ten years. Alex has been consistently taking about 80% decisions correctly every year. Bob, on the other hand, has been taking only about 5% correct decisions every year.

The company decides to keep Bob and fire Alex. Why?